Responsible Procurement

We recognise that some of our most significant environmental impacts lie in our supply chain. In 2009 we spent £170m on procurement (FY08: 349m). The ratio of spend remains at 80:20 between subcontractors and materials supply. Group trading agreements cover over 75% of this spend. Our Group Procurement function ensures that all products and services meet our requirements for quality, sustainability and cost. We see our suppliers as key partners in ensuring we can deliver our sustainability targets.

2009 was characterised by the pressure of the economic downturn on the supply chain, with the rapid reduction in volumes impacting on viability. Crest Nicholson lost only two suppliers to economic pressure. We were delighted with the response of our supply chain in respect of both pricing and quality.

In 2009 we reviewed and reaffirmed our Sustainable Procurement Policy.

Engaging our suppliers

We continually review our standard specification, assessing both technical and customer impacts. In 2009 we revised the water specification in line with the new Code water calculator which allows us to specify the Code Level 4 requirement of 105 litres per person per day across all of our build in a manner more acceptable to our customers.

We are assessing a range of low and zero carbon technologies and worked closely with suppliers of air-source heat pumps including developing tailored customer support. We also carried out trial installations with manufacturers of photo-voltaic panels.

Challenges and next steps

As the economy recovers, our supply chain has to respond not only with volume increases, but with the new products and services demanded by the progressive increases in Government sustainability specifications.

Delivering sustainability requires aspirational and innovative procurement strategies. Our collaboration in the AIMC4 research project is seen by Crest Nicholson as a key enabler to developing the innovative products and build processes for cost effective delivery of zero carbon homes.

Julia Young, Manager of the UK WWF Forest and Trade Network said:

Responsible Timber Sourcing

In 2009 we reviewed and reaffirmed our Sustainable Timber Procurement Policy, and continued to audit and work with our suppliers.

Increasing awareness

Crest Nicholson engaged actively with the UK WWF Forest and Trade Network to develop a workshop on responsible timber sourcing for its procurement teams. The workshop set out the global issues relating to timber production, and went into the detail of purchasing and audit requirements. This has given Crest Nicholson's procurement professionals a better understanding of the issues involved in responsible timber sourcing, as well as confidence in setting out and policing requirements for our supply chain.

Procurement processes and contractual documentation have been updated, and suppliers and subcontractors are now made aware of requirements during the tender process.

Understanding our timber supply chain

In 2009 we conducted the second appraisal of our supply chain. The response rate improved to cover 82% (FY08: 58%) of our total spend.

Legality of source could be verified for 97% (by spend) of timber appraised. Forest Stewardship Council (FSC) certified sources made up 76% (FY08: 56%) of the total, with Programme for the Endorsement of Forest Certification (PEFC) sources totalling 21%. The remaining 3% contains timber for which legality cannot be confirmed. Essentially, this means that we are unable to trace the timber back to the source, and it is automatically labelled 'high risk', for review during 2010, along with the 18% of supply with no response.

Working with our supply chain

Our reviews of the supply chain provide us with an in-depth understanding of our timber goods procurement, which we use to assess and manage risk.

In 2009 we selected three key suppliers (kitchens, wardrobes and bathroom components) to support in achieving FSC chain of custody company certification. In 2010 we will maintain our review of existing suppliers, but will focus specifically on any high-risk sources.

Challenges in our supply chain

There are two main challenges we continue to face as a business, which impact responsible timber purchase.

1. Availability of products – Although there has been a considerable improvement in the availability of FSC certified materials, there are still some types of wood which remain unavailable – for example, roof trusses – which are only available with PEFC certification.
2. Partial certification – Large distributors use different branches to supply our timber products, some of which do not have chain of custody certification. This means that a gap, or break, in the Chain of Custody (CoC) exists, and certainty of the source cannot be guaranteed. We manage this risk by monthly monitoring and working with the supplier.

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Find out about our Sustainable Construction practices.